Stock futures slumped and treasury yields touched a new record low in Asian trading after US health authorities confirmed the first likely case of community transmission of the deadly coronavirus on American soil, fuelling concern over the outbreak’s spread.
In Thursday trading in Asian hours, US and European futures pointed to further losses with contracts for the S&P 500 and FTSE 100 down 1.5 per cent and 2.1 per cent, respectively. Yields on 10-year US Treasuries, which fall as prices rise, fell as much as 4 basis points to a new all-time low of 1.2922 per cent.
Oil price falls deepened, with global benchmark Brent crude down 1.5 per cent at $52.64 a barrel, its lowest level in more than a year. Japan’s benchmark Topix dropped 2.3 per cent, extending the index’s losing streak to four days.
The latest bout of market selling came after the US Centers for Disease Control and Prevention late on Wednesday confirmed a possible instance of community transmission of Covid-19 in California.
The CDC said it had confirmed the infection in a person who apparently had not travelled to China recently or been exposed to another known coronavirus patient. There are now a total of 15 confirmed cases in the US.
Share trading on Wall Street whipsawed overnight with the S&P 500 ending a volatile session down 0.4 per cent on concerns over Covid-19’s spread outside of China. The Wall Street benchmark has shed 8 per cent since hitting record highs earlier in February.
US president Donald Trump said at a press conference late on Wednesday that he had tapped Mike Pence, the US vice-president, to co-ordinate Washington’s response to the spread of the coronavirus.
Mr Trump said that the “risk to the American people remains very low . . . There’s no reason to panic”.
Coronavirus cases have spread to countries including South Korea and Italy and Mr Trump said other nations besides China might be “cut off” from US travel at some point.
The World Health Organization said on Wednesday that new cases reported outside China had exceeded those within that country for the first time.
Havens rose again in Asian trading on Thursday with gold adding 0.6 per cent to $1,650.38 per ounce.
“The price action since the weekend is a clear departure from the strikingly calm conditions of prior weeks,” said Tim Graf, a strategist at State Street.
He said heightened risk and volatility due to the coronavirus “should keep the already-strong demand for safe haven assets in place”.
Hong Kong’s Hang Seng fell 0.4 per cent but Chinese equities gained at the open. The CSI 300 index of Shanghai- and Shenzhen-listed stocks rose 0.2 per cent.
Sydney’s S&P/ASX 200 shed 0.6 per cent, making it the last large Asian stock benchmark to fall into the red for the year to date.
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February 27, 2020 at 12:47PM
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Treasury yields touch record low in Asian trading on coronavirus - Financial Times
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